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A gray-haired southern Democratic governor has won the White House, in large part because the public concluded the incumbent Republican president could not revive a sluggish economy. An important theme in the race was the Democrat's call for establishing fairness in the federal tax code, which, he said, the Republicans had stacked in favor of the wealthy. Now suppose that once inaugurated, the new Democratic president quickly proposes a middle-class tax cut. It fails to gain congressional or popular support, however, and is dropped. The president then puts forth his plan for tax reform, a confusing collection of limited loophole-closing measures, on the one hand, and corporate tax breaks and rate cuts, on the other. Pressured by interest groups, Congress finds the latter part of the plan much more attractive. Ultimately, the president signs a tax bill that cuts corporate taxes and slashes capital gains taxes on the rich. By the end of his term, the deficit is growing and the economy...

If you want to understand what corporate lobbyists in Washington, D.C., are trying to foist on us with the pending "stimulus" bill, look back to the first half of the 1980s. In 1981, Ronald Reagan pushed a huge tax-cut bill through Congress. For corporations, it offered an array of new loopholes, centered on super-accelerated "depreciation" write-offs for equipment and buildings. The results were staggering, as widespread corporate tax avoidance quickly became routine. Studies by Citizens for Tax Justice found that half of America's largest and most profitable corporations were able to avoid paying any income tax at all in at least one year between 1981 and 1984, with many enjoying multiple zero-tax years. The list of corporate tax freeloaders was a rogues' gallery of famous names. General Electric, Texaco, Dow Chemical, PepsiCo, Boeing, and ITT were among the long list of companies that paid nothing at all in taxes from 1981 to 1984. In fact, these and other companies were actually...